Our Investment in THR1VE

We’re thrilled to be leading THR1VE’s Series B financing — in fact, we’re doubling down, having led the company’s Series A round in 2015. We see THR1VE as a company with a core mission to transform the health and wellness of all Australians. That’s very ambitious and we’re excited to continue to support Josh Sparks (CEO) and team. Lachlan McMurdo and I will continue on the board, with support from the rest of the Blue Sky investment team.

From an outsider’s perspective, THR1VE may not immediately look like a traditional “venture” investment — it’s not “deep tech”, it’s a domestic focused business, and some of its distribution channels require capital to scale. Indeed, when we first partnered with Josh Sparks (CEO) in 2015, THR1VE was a fast-casual restaurant chain that was growing quickly, albeit mainly in traditional high density, high foot traffic retail locations.

However, we believe THR1VE is wonderfully placed to take advantage of a very large market (food retail) that is experiencing rapid change — in many respects, we see the company as having the opportunity to “close the loop” between fitness and food.

Market

Most media publications have covered the fundamental shifts that have been occurring in Australian retail over the past few years — and we believe food retail is only just beginning to feel the true impact of this.

In the past few years, we’ve seen food as a category go from a primarily two channel market (offline restaurants and wholesale channels) to now a rapidly growing omni-channel market opportunity. Newer categories (i.e. the fresh chilled meal category) are exploding in terms of growth, as are new technology-led distribution channels (i.e. on-demand food services like Deliveroo).

This has led to mass uncertainty as restaurant and food retailers see their cost and margin structure shift significantly — and we believe from this, opportunities have arisen. We believe THR1VE has made the transition rapidly (and at the right time) to a omnichannel food proposition — allowing their customers to engage with the brand in many different dining occasions.

Consumers can now enjoy THR1VE when dining out with their friends at high density urban food precincts in most major Australian cities, order freshly prepared meals to their door in under 30 minutes via on-demand food partners, stop in to buy THR1VE branded chilled, ready to eat meals at a growing number of Woolworths locations, or order through THR1VE’s eCommerce offering to have weekly meal plans delivered across Australian in under 48 hours. To put that in context, 12 months ago, THR1VE had one distribution channel — restaurants in food court locations.

Team

At Blue Sky, we’re often finding that we trend towards investing in “adults” — that term can be incorrectly interpreted. When we talk about “adults”, we’re not referring to someone who has grey hair, but instead has the capability as a chief executive / founder to lead a business from “start up” to “scale up”.

We’re confident Josh is that person. The reason for this is that Josh has:

The ability to scale companies rapidly — namely, being the ~30 year old Chief Executive of Australian fashion brand Sass & Bide, and helping to grow that company’s revenue 8X in revenue in three years to $XX million; but also

The grit and resilience to guide companies through testing or tough times — he served as the CEO of the US-based luxury fashion brand, Thom Browne, and restructured that business in ~12 months to help drive towards a successful exit to Cross Company.

One person does not build a big business though and we’re excited by the people Josh has helped bring into the business. Recent joiners like Dean Rogers, Amy O’Hara, Lynda Flyning, Alex Lambert, Nick Carroll, and the many other tenured employees that are helping THR1VE scale rapidly, are a testament to Josh’s passion for THR1VE’s mission and his ability to recruit amazing people to help build a long-term, sustainable business.

Vision

All of the above help spell out why we believe that THR1VE has built a strong foundation on which to scale its current operation. However, it is the vision of Josh and the team that underpin why we’re so excited to continue to support THR1VE’s journey.

There are three principles that we believe are critical to building a successful business in THR1VE’s space

Community vs. Transaction focused — THR1VE has a large following of consumers who trust the brand (their 75,000+ social media followers are indicative of this) and an informal community has emerged of people who are supporting each other through their fitness journeys. We want to formalise this with some exciting work underway to reward our loyal customer base.

Fitness as a feature — THR1VE has had a “protocol” fitness program for several years — it’s a static document though, and short of carrying a printed version to the gym with you, is not particularly practical. But the advice in that program is based on real science and does work. So, the business is now deep in planning on how to produce fitness advice for the masses that is engaging and a great experience.

Personalisation will reign supreme — We’ve invested in businesses like Shoes of Prey and fundamentally believe personalisation builds engagement, loyalty, and a better customer experience. THR1VE is only at the start of leveraging some amazing data it’s collected over the past five years to drive even better experiences for its customer base.

At the core, we believe very few companies has effectively “closed the loop” on fitness (i.e. exercising) and health (i.e. food and nutrition). We believe with omnichannel becoming omnipresent in the food space, there will be real winners in this space, and we’re excited to continue on the journey with THR1VE.

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